welcome to the show. the headlines today, here on tuesday, in asia, japan's new stimulus plan fails to excite market. in europe, we won't harm the city southbound so says britain's chancellor. and here in the states, president obama is set to outline new planes of mini stimulus, if you will, to get people off the unemployment lines. welcome to "worldwide exchange." i'm christine tan in asia where it's 5:00 p.m. in singapore. let's get a quick view of where

asian markets have traded or closed today. this is a pretty down session, nishltly some relief on the participate of investors after ben bernanke signaled that rates would remain low. investors taking the excuse to sell to take some money off the table. the stimulus package, obviously, in focus. the hang seng is up 1.2%, and the shanghai composite up 1.3%. the cnbc ftse cnbc 300 global index should be down, as you can see, two points. 4,535. >> we have bounced off the low, christine. we're one how into the trading day here in europe, and we just got a bit of green on the table. the cac 40, smi, back to flat. slim losses yesterday. technology, health care, media slightly stronger at the moment. the weakness is coming through

tesco this morning. the market was probably looking for something better. resources and stocks are slightly weaker. >> hey, ross, good to see you. >> interesting one in the states. >> if we look at the markets and the futures right now, looks like we're on track to keep that blistering pace on track. the dow would be up a whopping 11 points after putting one point on the board yesterday, christine. >> matt, president obama will outline new efforts today to tackle unemployment. he speaks in washington just before 11:30 a.m. the president is not expected to detail programs or resize spending figures. on monday, he hinted at possibly using unspend t.a.r.p. money for job creation. meanwhile, in the uk, british firms plan to stop laying off start in the year 2010 for the first time in more than a year. this is according to manpower's

outlook survey which shows the highest reading since the third quarter of 2008. jobs seem to be in focus, also the economy, as well. is it time to talk about global job pictures? joining us now, we have ajune na mahindra. good to have you with us. markets here in asia obviously lower. a lot of concerns about the outlook for the u.s. economy. is that likely to keep markets clarity? >> ipgs. the broader markets are fairly weak and you're not seeing it manifesting itself yet. there is evidence that the european consumer is finally stepping up and importing stuff

from asia. >> when are we going to get evidence? >> i suspect it would be sometime in the second quarter. the reason i say that is we have to have a firm peak in u.s. unemployment. and that, i think, will send a big signal not just to the u.s., but to the world that people are going to get more confident and start spending. i think all the signs are there that -- yeah? >> arjuna, i was going to say, we have some evidence now depending on which story you talk about that maybe the consumer is reigning things in a little bit. >> well, yes. that's the problem. when you look at the results from the third quarter, what you found is companies that improved their market share and improved the top line growth, paid the price in terms of having to shrink their margin peps it's very clear that the consumer is very resistant either to pricing or extending their spend. and i think that is a function of the unemployment rate and perceptions of how the economy

is going. there's still a lot of doubters out there. and that, i think, is why the price of gold has gone up. a lot of people just don't buy this recovery story as of yet. and i think we need another quarter of the same, as far as last two quarters in terms of better margins, you know, stronger growth of top line profitability before their conviction finally sets in across a broad suede of the market that this recovery is for real. >> you're convicted though, are you, arjuna? >> i am, indeed. i follow the economic cycle research institute which i think is one of the foremost forecasting organizations in the u.s. they have consistently shown in the past, you know, the accuracy of their forecast and they're looking at fairly good numbers in terms of the lead indicators for a broad based recovery. i also feel that the u.s. consumer is not damaged as a

whole. it's really the lowest qutile, which only accounts for about 9% of total u.s. consumption. so there's a fair chance that the higher quintile will start responding to the better employment numbers ahead. >> that said, when do you see rates rising at the earliest? >> fourth quarter 2010. the central bank can do lots of things through absorbing liquidity. so it's not necessarily the case that the tightening has to be signaled by a rate increase. you could have tightening in other forms. taking place before that. as surprising numbers keep surprising from the up side, that could probably be brought forward to the third quarter. >> is there a risk of a policy error here? >> well, it's very difficult to get this is things perfect. the banks are currently -- the

u.s. banks are funding the dollar's deficit by buying government pay by treasuries. at some point next year, they're going to start lending to the broad public of corporations and individuals. at that point, there won't be sufficient buyers for u.s. government paper. then, short-term interest rates will start rising and you could have a coincidence of the fed starting to hike rates. so by 2011, there is the possibility of a policy error and that b i think, is the nature of the beast. we can't be that precise in terms of trying to achieve a soft landing. >> arjuna, there is an old saying that recessions die of old age. but now governments all over the world feel they have to get in there and do something in the name of stimulus when the truth is there was a study out yesterday that said the average stimulus job created in the u.s. has cost $250,000. it's ridiculous and yet we're on the cusp of doing even more of

it. >> absolutely. but the problem is, a, the fwanks are not lending. that's one thing. and also, i think they're wait to go repair their balance sheets, get their capital adequacy back to a reasonable level before they actually start lending to the public. so the only option i think we have is for the government to keep issuing debt and to mount these public works projects, which will hopefully kraifl create employment and keep the economy ticking along until broader confidence is reestablished. so i think i have no problem with that. that is something that you have to sort of dig holes and fill them up and keep people employed. i think the issue, really, is whether this debt creation on the public side is sustainable

and that is the trillion dollar question out there. >> we want to talk more to you this hour. matt, over to you. >> let's get a couple of new stories under our belts, if you will, that are happening around the world at this hour. citigroup and wells farlgo are sparring with the government over how much new capital they have to raise to get utah of the t.a.r.p. that they owe. citi has been told to raise $20 million, while wells has been told to drum up millions of dollars. both banks are worried that they could be at a competitive disadvantage after bank of america reached a deal last week to repay its t.a.r.p., which is just the inverse of when they were getting the t.a.r.p. both stocks, 1.5% lower today. cnbc has learned ken feinberg will not raise a $500,000 salary cap for aig's top 25 executives. evenberg is expected to rule on pay plans for the second tier of top earnses at aig and five

other companies by next week. soushszs tell cnbc he'll boost the flexibility of those packages if good clause, not santa claus, is shown. good cause. >> i thought good cause was santa claus. >> according to reuters, the local government is mulling part of its prebudget report. mr. darling has told a business audience in a speech last night that he doesn't want to undermine the banks, although they must show restraint overpay. >> and give us your money, that's what banks are being told operating in the uk and starling is asking overseas banks, as well, to pay between $40 and $55 million between national

investment funds that will provide lendling to credit strapped businesses. >> ross, speaking of money, japan has unveiled an $81 billion stimulus package to prevent the economy from tipping back into recession. elsewhere, general motors is in talks to sell some of the assets of its swedish saab brand. the partial sale would pave the way for gm to liquidate other saab assets and could threaten more than 3,000 jobs in sweden. gm is consider other bidders who want to buy all of saab.

the automaker will provide an update of its business plan today. u.s. envoy steven bossworth has flown from usair bath in south korea and a arrived in north korea for a three-day visit. he will aim to bring north korea back to six-party talks. still to come on the program, the japanese government has unveiled a pretty big economic stimulus package, but have they found the magic formula to prevent the double dip examine prevent the economy from tipping back into recession? more on that plus just a reminder, oil is at $73.98.

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it's just a few minutes past 9:00 in london. 15 minutes if you're on continental europe. all eyes today very much on the -- we've got a big auction going on, the three year in the states. the 10-year bund yield, 3.19%.

we got a little boost from mr. bernanke's comments yesterday reiterating rates will remain lee for some period of time. the 10-year note yielding 3.42%. we've got auction later in the day, we've got a $2 billion auction on ten-year notes thursday and it's a big week for digestion in the government bond markets. christine. >> speaking of digestion, ross, in the forex markets, the dollar is looking pretty mixed. initially, the dollar is still weaker against the yen after those comments from ben bernanke cooling or dampening speculation of an early rate rise. the dollar moving lower against the yen. 88.95. euro/dollar, 1.4823. sterling/dollar, 1.6350. and euro/sterling, 0.9064. matt. >> this 8th day of december, christine, the economic calendar looks to be pretty clear. investors will focus on another

treasury auction. we've got $40 billion of three-year notes coming out. president obama is going to give another key economic speech about jobs. we'll be on pins and needles waiting for the detail on that one. and then we've got a couple of earnings reports to speak of today. h&r block, the tax preparation service, kroger's, the departments of the super market chain and talbot's, the women's clothier as they go on high street. ge capital continues to struggle with mortgage losses and credit card issues. ge is touting their lending to small and mid sized companies even as they make fewer loans overall. >> matt, european stock market res pretty flat at the moment. we'll bring you up to speed with the main stories in france, germany and the uk. becky is going to get us under

way in london. >> it's one of the biggest decliners on the ftse 100. they did report a gain in sales, but it was at a slower pace than analysts had been expected. we were looking for like-for-like sales. it was taken as a negative by the markets overall. >> yeah. what are they saying about what's going on with overall sales and consumer confidence? because also, they're exposed to international markets, about 25% of that profit. >> absolutely. they are exposed to various markets. the main part of the business is here in the uk. they said a couple of things, really. improved trends in the uk and in their international business. they haven't changed, really, their outlook. they say they still see a gradual consumer recovery coming through, particularly here in the uk. another point to note about tesco, the value added tax which was cut about a year ago, it was

decreased a year ago, it wasn't cut entirely. it's going back up. tesco is saying that won't derail the recovery, but if there are any further increases beyond that, that would be a damage to their business. >> okay. xstrata is weaker today, also. what's going on with them? >> it was one of the biggest decliners on the markets yesterday. it was about 1.5% lower. some of the miners are fairly weak today and added a point to note here, they said this morning they will take a charge of about $2.5 billion in relation to some of the struggling nickel and copper mines. that is giving a downside to chairs. >> becky, thank you for that. sylvia is in frankfurt. we've had some fairly good news from the premium carmakers in the last 24 hours, sylvia. >> yes. car sales are looking good for

the german carmakers, especially now for the top end of the market. after the cash for clunkers was mainly beneficial for the lower end of the market, which means volkswagen and a lot of the other automakers that are not german, for the opels and the fiats and pageos. car sales are picking up, as well. the real driving force is china. bmw is hauling in sales out of china. it's clearly this recovery that is happening in the asian markets and especially with the dynamics in china that's driving us forward. and talking china, siemens pushed up by the chinese collection, so to speak, because they had some big ticket orders out of the chinese market. so it's really the german exporting segment are benefiting

from the boom that is happening out of asia and that's hopefully going to get kick starting us here. we've had, of course, orders out yesterday, incoming orders that weren't looking all that well, especially the downward revision for the previous month. by and large, the economy is reasonably supported. beyond the dax 30, there isn't a lot of music in there. we are flat lining it, basically. that's the bottom line. the lack of the investor. the institutionals are not until the mood for a christmas rally. >> stephane is in paris. what is driving us right now? >> it's very quiet, ross. it sounds like it's christmas already. we had less than 2 billion euros traded yesterday in paris. less than 400 million euros since opening this morning. really, tin investors are not on the market today. but there's a positive session so far for most of the banking stocks, including societe generale. the bank wants to reduce its

cost by 1 billion euros for the next year. societe generale to reach this target launched 340 initiatives, including, for instance, to share more resources between its different businesses. societe generale was trading lower this morning, but it's now one of the best performers, up 0.8% on the stock. >> trimming costs, is that job losses, stephane? >> at societe generale, there's no confirmation and no indication for the time being. but earlier this week, one group said the french bank could close between 750 and 1,100 branches over the next three years and that would mean up to 2,000 job cuts. in france, we have more branches, bank branches than the average in europe. for instance, in france, it's one branch for each 1,600 people. that's to compare with one branch for 2,000 intermentants

in germany and 1,000 people in average on europe. definitely, there are too many branches in france and that's the trend probably for the banking sector in france. also in focus today, air france klm, the stock is trading higher on the french market. the company announced a 2.3% decline in november. that is the positive news. air france klm has seen a positive signal over the last couple of weeks so there's an improvement in the business. ross. >> ste finance, just talking about bnp paribas, arjuna mahindra is still with us. arjuna, if you're going to be a bear in this recovery story, one of the things people are still talking about is very tight credit conditions. here in the uk, he wants them to set up a fund to invest in or in credit for small and medium sized enterprises. why are you not concerned about

tight credit conditions in the west impacting on growth? >> right. i mean, the growth that's currently coming through is clearly from the public sector. it's the fiscal stimulus and the extent that that fiscal stimulus is being funded by the banks themselves he while buying government paper instead of lending that money to the public, it is sustainable and that growth will assist. what the banks are doing in the meantime is they're playing the yield curve. they take and deposit very low rates of interest which are investing in these treasuries and as a questions, they're repairing their balance sheets. that's what's going on. at some point, they will start lending to the public because they see the risk of default, etcetera, diminishing to the point where it makes sense to do so. and i see that coming in the second quarter of next year because of the general pick up in the economies that we've already seen. so if all that works according to plan, i'm not at all

concerned about this lack of bank lending in the short-term because it is actually coming in directly through public spending. that is how i see it. >> arjuna, speaking of another risk, you say there is another potential for policy risk. if china and the u.s. were to tighten at the same time. what are the chance oefs that happening? >> well, there's a fairly high chance of it happening next year. the chinese are obviously quite concerned about inflationary potential in the domestic economy. if you look at the measures of money supplies, growing very strongly, at least in the last two or three decades. this obviously has huge implications in terms of future inflation. and i think there's a vigorous policy debate going on in china right now about how and when the exit has to take place. my hunch is -- i mean, we've just seen the bureau finishing their economic sessions yesterday.

and the message was steady as she goes. the status quo will prevail. don't tighten anything too soon. but i suppose they're waiting for exports to revive to the point where they don't have to depend so much on this monetary stimulus and fiscal stimulus in the domestic economy. that could happen sometime i think in the third quarter of next year. arjuna, we'll have to leave it there for right now. still to come on "worldwide exchange," last week's u.s. employment data came in better than expected and the latest reports show that uk companies plan to start layoffs next year. so is the job crisis over? >> and does that mean we'll get any growth? we've got latest insight on that right after this break. xxxxí

you're watching cnbc's "worldwide exchange." the headlines today. >> here in asia, japan's new $81 billion stimulus package fails to excite markets. the nikkei snaps a six-day rally. >> in europe, we won't harm the city, so says britain appears chancellor as speculation about a bonus tax rolls on. >> and in the states, president obama set to outline new plans to get people off the

unemployment line. >> we're just about to get some data out of the uk. global equities getting back towards the flat line. we're right on it. ftse cnbc global 300. we had a negative point for european bourses, but they have since been revised back. uk, industrial production, unchanged month on month. that is weaker than expected. we're expecting to be up 1.4% on the month. september was revised to up 1.5% on the month. industrial output, unchanged month on month.. again, september was revised down. october manufacturing output down minus 0.3% on the month and industrial output down minus 1.4% on three month, as well. i wonder if we've got any reaction to sterling? do we have a sterling chart? again, with the revision, as

well, we're underscoring a degree of weakness here as far as the manufacturing and industrial output is concerned, that we thought we moved away from. but we'll reinforce some doubts about that. sterling/dollar, just hitting back down to its low point of the session. we've got some guest reaction analysis on this in a few moments' time. before that, i'll hand it over to you, christine. >> hey, ross. it's 31 minutes past 5:00 here in singapore. let's get a few of where asian markets have traded today. a lot of concerns continuing about the u.s. economy. a little reaction to the $81 billion stimulus package coming out from the government. the hang seng is down 1.2%. the shanghai composite is down 1.1%. elsewhere, we have some of the other markets moving lower, as. kospi is lower, 1.3%. the bombay sensex is one of the

fewer margins trading to the up side by 1.4%. and the aussie markets are lower by 0.12%. >> we're 32 minutes past 4:00 in the morning here in the states. the futures have firmed up a little bit. seem to be almost 30 points higher on the dow and this after we put that one point on the board yesterday, ross. >> okay. we'll get a little bit more on this data. arjuna, we're waiting for another guest to show up. i want to get your view on this. it's pretty clear the industrial taet is just out of the uk. but it's unchanged on the month and we're expecting it to be revised higher. we have seen a lot of the data taper off. we've seen recovery. then we've just seen it taper off. >> indeed. and i think we are going to see more of that in january/february, i'm afraid. and there's a specific reason

for that. what you noticed in the data was that the ism, you know, the new orders indicator in the u.s., which is a very significant leading indicator of manufacturing, and it affects the global situation, including the uk i would wager peaked in august this year. and then it dipped slightly from the 55, 56 it registered in august. that's been a consistent pattern in all economic recoveries since the second world war. you've seen the ism rushing up for about four or five months and then it dips a bit. so i expect the same pattern to prevail in this recovery and i think we'll see manufacturing data soften slightly towards february and perhaps start picking up in earnest from april on wards. >> arjuna, in his own words, ben bernanke referred to the recovery as fragile. obviously, they're not in any rush to raise rates and that got things going here again, but

mostly due to the weak dollar. i mean, do you think the weak dollar trade has much life left in it or is it tired and we can't figure out what the next trade is going to be? >> i think the carry trade is alive and kicking and i think it's going the last many more months, at least six to nine months in my view. if the fed is not going to raise interest rates, if the banks are not lending, there's a lot of flash from the uk numbers. a lot of traders are using this as an opportunity to borrow money cheap in dollars, in yen, in other low interest rate currencies and put them into higher yielding ones. and, you know, there's a fairly good prospect that that trade will be profitable for several months to come. so i don't see any problem on that, you know. >> let's bring in sarah hue y , hewin, as well. industrial output unchanged on

the month. we thought it would be up 0.4%. and september for both of those sets of data revised down, as well. so obviously, disappointing because we're weaker than expected. arjuna said look, we will have a tapering and then we'll pick up again in the new year. what are your thoughts here? >> very disappointing data. we have had some hints from the indices that all was not well with manufacturing. i think it does sort of throw a question mark over exactly what we can expect for the gdp data in the fourth quarter. at the moment, our view is that we'll see a good upward revision of the third quarter data and a return to growth in the fourth quarter. we still think that that is the case because services are doing well. obviously, there is a lot of uncertainty in the manufacturing sector. >> particularly, we have to

remember the uk manufacturers do benefit from the weaker pound. >> yes partnership mean, i think that is another sort of cause for concern. the sort of stock cycle should be supporting manufacturing production and there should be support from the weaker pound. so if we are seen these thoughts of lackluster numbers come out on a monthly basis, then i think we have to be worried there isn't enough strength in the uk to support a strong recovery. >> sarah, hi. this is arjuna. was there ever any restocking that took place? as far as the national income numbers are concerned, we seemed to be destocking for 2009. is the uk any different from that pattern? >> you're quite right. we have been desock stocking.

we've been destocking rather at a slower pace rather than rebuilding stocks. that ought to give some comfort in coming months. these data are looking backwards to september, october. i think there is sort of a certain about a disappoint that a huge valuation we've seen in sterling hasn't been more supportive. hopefully the stock cycle will continue to underpin output in the uk economy. but of course, that impact will fade in 2010. >> sarah, this is christine here. what do you make of this extra stimulus package coming out from japan, will it be enough to avert a? >> we're likely to see those q3 data revised quite a lot weaker.

so this certainly seems to be a near for more of a stimulus. governments are particularly concerned about the risk of deflation taking hold in the economy. so that is another reason why this sort of package seems to be necessary. >> arjuna, with do you think this package will be enough? >> japan is still an export dependent economy, even though it's the second largest economy in the world. china was importing a lot of technology from japan at that point in time. china is clearly not importing as much as it was then as it is now because it's clearly trying to stimulus the economy from within. so i think the japanese really have a problem here. the stimulus package, in my mind, stho is not big enough.

$81 billion in this day and age seems a fairly meager number. and, of course, the new government itself has been sending out fairly confusing policy signals in terms of what they want to achieve. they wanted a stronger yen. noer through backtracking on that. they're not entirely clear about what the fiscal stimulus really means, who will it benefit? will it go straight into people's pockets or will it be going back into the oenl old pattern of roads to nowhere, etcetera. all this begs a lot of clarity. >> i think the other issue, of course -- >> and it all has to be repaid. i'm sorry, sara, you were saying? >> that's the point i was going to make, actually. with the focus very much on high levels of government debt, particularly for some of the major economies, i think there is a balancing act to make sure there sa strong underpinning to growth and avoiding exacerbating

and already pretty dire government debt situations. in terms of exports to china, i think we're probably a little bit more optimistic. it's true that the strong yen is a constraint, but we see good pick up across asia and we think that that is going to provide growing markets for japanese exporters. >> well done. sarah hewin, always excellent to see you. arjuna mahindra, at hsbc private bank asia, also, is going to be around. folks, stay with us. "worldwide exchange" with is going to take a break. we're coming back and we'll continue to talk japanese stimulus. they've unveiled a massive version, at least by their measures. will that work or not? is it going to prevent the economy from tipping back into recession as deflation persists?

before we go to break, here is a quick look at how gold is trading.

welcome back to "worldwide exchange." you're looking at a beautiful shot of singapore. it is 5:43 in the evening. let me tell you, i can tell it's a beautiful, sunny day here on tuesday. let's check in with nozomu kitadai. >> hello, christine. one thing is clear about the stock markets. nikkei index retreated for the first time in seven trading days to close the day at 10,140. many traders see the package as helpful, but hardly enough to cover the roughly 35 trillion yen demand shortfall in the economy. the new package unveiled this morning includes 7.2 trillion yen in spending. and incentive to spur demand for

cars, electronics and homes that consume electricity. the budget is likely to involve sales of securities around 9.3 trillion yen. that would bring the total debt issuances of a current fiscal year to 3.5 trillion yen. however, many others are concerned that the government has yet to lay out medium and long-term growth trat strategy for addressing the yen strength in rising deflationary pressure. some suggest that the government needs to implement tax cuts and deregulatory measures. that was the nikkei business report. christine, back to you. >> kitadai-san, thank you very much for that. there are some concerns about japan's new stimulus package.

the government's new power is desperate to return to. let's talk more with our next guest, david and arjuna is still with us. is this package big enough to avert a recession in japan? >> we're actually going to see the impact of that over the next several weeks and months. but the fergs out tomorrow are going to be in negative territory. the timing of the stimulus package passing today just in advance of news on the gdp, i think, is significant. the effort is a sooerus one. and i think that it will, indeed, have a positive impact, although as other analysts you've just been hearing have also indicated that the impact is not going to be as large as

would otherwise be hoped. >> we've been talking about this because something needs to be done to address the strong yen. and arjuna, whakt be done on that front? do you think the japanese authorities will more on the forex issue? >> this is a very, very difficult quandary that the authorities here are in. i don't think that they are likely to move in the near future. i think that given the slow decline of the yen over the last several days, they are unlikely, even more unlikely to move. they have indicated that they are not eager to intervene in the currency markets and i don't think that they will. they are also very aware, however, that the strength of the yen will have a long-term, over the next several weeks and months, impact on ex ports, which are a crucial area of

economic growth in japan, anywhere from 12 pergs to 14% of japan's gdp is tied directly to ex ports. but that is an area in which japan cannot afford to slip further if the yen stays strong for too long. >> david, if you remember, back in 2004, we had similar intervention, you know, talk in the market and eventually the boj did actually step in and flood the market with yen and that eventually resulted in the yen weakening through late 200 4/and 2005. do you think we'll see a similar pattern emerging here in 2010? >> the authorities cannot permit the yen to stay strong for too long. what we've seen also is the bank of japan's willingness to inject

liquidity. with very serious effort under way to prevent another fall into recession, what you've described historically from the 2004-'5period is still very much in the cards. coming up into 2010. >> hi, david. it's ross here. it's interesting to look at the strength of the yen in comparison to the dollar or the pound when you compare sort of government borrowing. and what, fiscal net debt japanese government 200% of gdp? i get the fact that we have a lot higher savings rate in gentleman opinion. do you have any concerns about the size of the debt that we've got there and the issuance? >> the debt to gdp ratio in japan is historically high. japan's in peace time is at

record highs. this is not smlg in the short-term, but rather in the long-term. and japan needs to return to its growth potential. let's say 1.5% to 2% growth in order to buy down that debt over the long-term and get its fiscal spending under control to prevent a furthering of the debt to gdp patiento. this administration, although it has ended -- come to the end of its honeymoon phase and it's losing some popularity, is nonetheless, i think, quite committed to -- on the one happened, stimulating the economy. on the other hand, not permitting the debt to grow astronomically or at a pace too fast going forward. >> david, i believe this is the fourth stimulus package from the japanese government. what did they learn after the first three? >> well, i've almost lost track,

but i think the other way to look at it is if you go back historically as one of you just has, look at the period of the long decade of the 1990s in which four very, very serious stimulus packages have percentages much greater than what we have seen today. we're essentially necessary to keep the economy afloat. there are some who would argue that those stimulus packages rescue the japanese economy from going into a tailspin in the 1990s. so with that kind of historical back drop, what they have learned is that it is crucial to stimula stimulate, stickily in ways under the new administration, ways that will put some money back into the consumer's pocket that will be spent rather than saved. and so i think they are still adjusting, they're looking for ways they might stimulate the economy more effectively than those roads and bridges to nowhere. >> let's hope the japanese

consumers start spending instead of saving. david satterwhite, thank you for joining us. now for a look at the indian markets, ayesha faridi joins us live for the india business report. looks like the markets are moving higher today. >> yes, they are. the way we started, it seems like it's going to be a quiet and lazy session for us over here. but perhaps europe opening and europe opening smartly in trade for the sentiment one has trickled in. we're staring is a good 250 odd point run up. the nifty going good. we are trading at the 50 odd levels in excess of that. and the whole host of sectors are looking good. real estate, oils, metal and gas, all the sectors are posting higher gains. we have comments coming from saying that there will be a negotiated royalty to heineken and royalty to heineken will be

about 67% of the sales value, as well. they cannot xooet exceed their current state. comments coming from in from heineken said ub will not get any cash in this particular transaction. >> can we talk more about this deal? the one expect any cannibalization on account of the deal? what does it mean for both parties, exactly? >> that's quite a point. this particular deal is beneficial for both parties, as well. we have comments coming through of the chairman of the company saying it's a win-win situation for both parties. he says they never intended to pay heineken any up front fee and they do not expect any cannibalization on account of this particular fee. heineken will be positioned on top of the ub group's top liquor

brand. >> ayesha, thank you very much for that, ayesha faridi live from mumbai. now for an overview of the rest of the asian markets, we have saijal patel. >> we saw a lot weakness today, christine, but there aren't a lot of catalysts to encourage buying right now. buying has been thin. japan was a little bit weak, down about 25%. we saw a sell-off in the banking stocks and the resource link shares pretty much leading the lows, as well. south korea's kospi was a little bit weak. posco, also down on the drop in metal prices. i want to talk about the bank specifically. there's a media report that the fair trade commission has launched an investigation into bank's possible conclusion when it comes to setting market rates. again, this is a report. we don't know what kind of impact it will have. but it did trigger a sell-off in some of those banking shares

today. on a positive for south korea, that's a jump from its previous forecast up 6.4%. australia was a little bit weak. we saw a sell-off in some of those gold miners, but the diversified miners putting in some decent gains there. where we saw a big brunt of the selloff was the greater china region. concerns about overmrooi supply, once again, hitting the market, the securities time saying eight companies are planning to list on the chinex and they would launch subscriptions sometimes for those ipos in the next week. >> okay. thank you very much for that, saijal. saijal patel with the outlook of the asian markets. arjuna, we talked about our concerns for the banking sector here in asia. hsbc sold off because of exposure to dubai world.

are there particular concerns to that sell-off? >> not particularly. i think this concerns to regulation in particular. will the banks be forced to stomp out more capital in terms of their capital adequacy ratios. we had that whole issue brought up in china last week. and i think the after effects of those concerns still are depressioning bank shares. my view is that eventually banks are repairing their balance sheets and this process will take another three months or so. and at that point, the market will realize that internal generation of capital is going to be very strong and that is eventually going to make bank shares more -- >> if there's one final word you could leave us with in less than ten seconds, what would that be? >> industrial production picked up earlier this year.

it's now easing somewhat because banks are not lending to the public. and until that changes, we will not see a sustainable recovery. that will happen in the second quarter of next year. >> arjuna mahindra, thank you so much for joining us today. coming on "worldwide exchange," the world's biggest ever climate summit continues in copenhagen. will it achieve anything substantial or is it all just hot air? we're live in the danish capital later on in the show. >> and we kick off a big week of auctions for treasury today. we have a $45 billion auction of three-year notes. how is that the going to play into the week?

welcome to "worldwide exchange." in our headlines at this hour, president obama is set to outline a new plan to get people off the unemployment line and maybe spend a little more money stimulating things. >> and the uk and industrial output failed to grow in october missing expectations. >> and here in asia, japan's new $81 billion stimulus fails to improve markets and the nikkei snaps a six-day rally. >> nice to have you here on "worldwide exchange." we're going strong in our second hour, so buckle up.

it's going to be a good ride. it is the start of your global trading day for many joining us at this hour. let's take a peek first and foremost after the u.s. futures are shaping up. we saw mixed markets with the dow adding a point. it's firming up as the day goes on. you're about 35 points higher on a fair basis. ross, how are we looking on your side? >> we're in negative territory, matt. but here we go, an hour 1/2 into european trade, we've warmed up up .3% for the xetra dax. autos, health care all helping us to achieve some gains, christine. >> hey, ross. here in asia where it's 6:01 here in singapore in the evening, let's get a quick check off how the currency markets are doing. the dollar is looking weaker against the yen, 88.79 euro/dollar 174852. sterling against the dollar,

1.6341. >> some of the stories we're following from around the world today, the british chancellor alistair darling has said he won't do anything to harm the governments. mr. darling did tell a business audience last night that he doesn't want to undermine the banks, although he says they must show some restraight overpay. at the same time, british firms plan to stop laying off starr for the first time in more than a year. this is according to manpower's quarterly outlook survey. the findings show that only finance firms and utility companies plan to increase hiring. >> president obama is going to outline new efforts to today to tablg unemployment. he is not expected to detail

programs or precise spending figures. on monday, he indicated using t.a.r.p. monies for job creation. the house could vote on a reform bill by friday. citigroup and wells fargo is sparring with the government on how much new capital they need to raise to pay back their t.a.r.p. and get out identity. the wall street journal reporting that citi has been told to ray raise $20 billion, while wells for now must drum up millions of dollars and get back to us. the banks are worried that this could be at a competitive disadvantage after bank of america reached a deal last week to repay its t.a.r.p. obligations. in frankfurt, germany, all the stocks are down 1 mers, 1.5% right now. speaking of b of a, the board

there could name a new ceo when it meets today. analysts say the timing is a deal, coming days after the company repaid that t.a.r.p. chief risk officer greg curl could have the inside track. morgan stanley's incoming o jim goreman is set to shuffle management. goreman will put the cfo in charge of institutional securities. that's the company's biggest division. checking out the stock of b of a, you can see it is down about 2%. morgan stanley, also 2% lower. >> japan has unveiled a stimulus package to prevent the economy from tipping back into reseg. still, economists say it would not provide a significant lift to xhe the economy.

elsewhere, still in japan, the current account surplus rose for the third straight month in october, largely due to strong asian demand for japanese goods. but economists caution it may continue to drag on the current account. and we're watching out for third quarter growth figures due on wednesday, tomorrow. japan's economy likely expanded at a slower pace from july to september than the previous quarter. so will president obama use a carrot or a stick? the climate change legislation passed through congress. well, he may have found a stick now that the environmental protection agency says greenhouse gases are officially harmful to humans. we're going to have more on the ground with a live report from copenhagen. leaders from around the globe are huddling up. find out about, well, the carrot side of that equation. 

a speculator has returned to the markets after a global financial crisis causing a bubble to form in commodities and creating new risks for the dollar according to veteran wall street economist henry kaufman. and state controlled dubai world is in discussions with its creditors to find a new date for roughly $3.5 billion u.s. dollars for new debt maturing on

december 14th. and use the t.a.r.p. to get 70% returns on clean energy. you can find this and much more on cnbc.com. >> and welcome back to "worldwide exchange." let's do a quick check on how the gold prices are doing. we are seeing a weaker dollar, see how that is impacting the price of gold right now. spot gold is trading along the ranges. let's pull the board up, shall we, and see how that is doing. it is loading, i'm told. give us a second. but gold, according to my watch, is edging higher on european trade because the dollar is dipping after the fed chairman says the u.s. economy remains fragile. that is impacting sentiment for gold. ross, we don't have the chart. i'm assuming that the price is up. >> we'll get that chart to you, but i think you're right with that analysis. >> let's get more.

phillip po is with us now. a big focus, we have plenty more bond auctions this week. we kick off with a $40 million three-yee and more tomorrow and thursday. so far, all these auctions have gone fairly well. do you have any concerns that the appetite wanes? >> big time i have a concern because what the u.s. has done is focus all the auctions on the two-year secretaries because that's what they knew the market would be willing to buy. but eventually one hit a limit as to how much you can mortgage the future of the u.s. on a two-year time frame. so they're going to move out the duration curve. as they do that, we'll start to see the stickiness and my guess is the auctions will get a little wobbly. they'll be wobbler overnight. but the bond market is susceptible to any indication

the fed is going to withdraw liquidity. i think that's really important. >> and the message is that that is going to happen a lot earlier than any change in rates. >> that's right. >> how are we going to manage that process? >> i think they haven't got a clue, but i think their determination to figure it out is really strong. but the bottom line is, if the yields rise on the longer term u.s. treasuries, i would expect that to be a dollar strengthener. and net-net, pretty bad for risk asset prices. >> yeah. we certainly have seen that. the dollar trade has gone forever and ever. what do you think about the currency? is it time for the government to get real and really have a strong dollar policy rather than just a spoken one that pretty much is laughed at around the world? >> you know, bottom line is as a policymaker, what can you do? it's something you have no control over. the best you can do is say, practically zero, it's not

surprise to seyo is relatively weaker. the key thing is to signal to the public that you don't intend to weaken the currency to export your way out and i think they're being careful to avoid that. >> philippa, while everyone is concentrating on this back drop, behind the scenes, there is a crisis happening in the middle east and dubai. have we seen the worst of the dubai crisis? >> well, in my mind, the dubai crisis is a symptom of a much larger phenomena. so to me, it's the beginning of a story about sovereign default. and people need to remember that defaults are when people ask for

moratoriums, and i think we'll hear more about debt in the coming year. >> what sort of regions? what sort of areas? >> well, i think we're going to see at some point we'll see some of the european countries, i think ireland over time will have to stay -- >> we just saw greece downgraded yesterday. >> yes, absolutely. i think there are going to be lots more corporate bonds like dubai world. i think you'll see it in the states, not only california, but new york state is teetering on the brink with no cash flow. so what amazes me is the market keeps being surprised that people don't have the cash flow to pay off the bond payments. we're going to see more of this. >> what is the feedback loop from that? >> pretty negative. >> into asset markets, into the dollar and -- >> pretty negative. although we recovered from dubai

world pretty quickly, that was impressive, but i wonder how much that was assuming it was a one off never to be seen again phenomena. if we see one or two more -- i mean, think of when the is up subprime crisis started. i'm not saying it's on the same scale. i'm saying there are entities out there that will not be able to make their payments. >> and they're looking at another extension in dubai of 1.6%, as well. so those markets are obviously having to deal with their own internal comments at the moment. we'll here in europe, i'm happy to see things have turned around after a soggy start.

we have seen more green on the board. becky is with us. tesco has been a faller today. >> yes. just checking in where we are now, still down for tesco, but just by about 1.1%, also. just to fill you in on why we've seen shares of this company declining, it's the biggest super market chain in the uk. it demands a big proportion of uk spending power, as well. they reported higher sales growth, but it's weaker than expected. the fact that they reported sales growth of just 2.8% rather than 3% has been taken negatively by the markets in general and it's saying the share is lower. >> xstrata has been under pressure again today. and, you know, we talk about risk appetite is exemplified by the mining stocks. what is the specific? >> xstrata is one of the stocks that tends to move in tandem with the global economic

conditions with the miners. angelo american, xstrata, and today, xstrata was down by about 1.3%. they told us today that they are taking write-downs of some $2.5 billion to the restructuring of nickel and copper mines. >> becky, thanks very much, indeed, for that. we're up just a little bit on the frankfurt market. let's go over to sylvia, who has the details on that. sylvia. >> well, a similar story here. we had a soggy start. now we're nicely into the plus zone. again, not dramatically so. they looked relatively good. when you look at the growth figures, it's asia and china that is holding in record sales.

and the same story with siemens, big ticket orders out of china and we've seen a number of stories like that from other german companies in the second and in the third row. if you look at machine totals, machinery, there's a lot going on for them in the asian market and with particular stress on china here. and banks are getting some more focus there. >> there is no confirmation from societe generale, but that makes sense because we had a report a couple of days ago saying that the french banks would cut between 750 and 1,100 branches

over the next three years. that could lead to more than 2,000 job cuts in the banking sector. in france, that would be a way to reduce costs in the banking sector. they're all trading higher right now. societe generale is up 1.2%. and bnp paribas, the largest french bank, is trading higher. also in good shape today, air france klm. they announced a 2.3% decline of its passenger traffic. the load factor was the most unchanged, with you in a statement, the airline says there was improvement in other parts of the business and that's the positive signal helping stocks to trade a hit higher. >> stephane, mer ci. >> banks are clearly in focus today in yash. saijal. >> for a number of reasons. we saw a big sell-off of banks in the region. i want to talk about chinese

banks, though, because it looks like they're facing a number of headwinds today. we saw while there was a securities times report that the arm of beijing sovereign wealth fund, which is a major shareholder of some of the top banks may not reinvest their dividends back in some of these stocks, which would boost their capital. and that would mean that they would have to turn to the markets to raise capital. i think what's also interesting is the reason they want to raise capital is to replenish some of the money because of the lending growth. and that may change. there is another report that china is going to curb lending to 7.2%. so all of these things are a bit of a concern and what kind of trickle down effect it would have in the economy. oversupply is another factor.

hang seng index down about 1.2%. japan's nikkei down about 0.25%. banks were weak and we saw some profit taking happening in the exporter stocks there. ross, back to you. >> saijal, thank you very much indeed for that. we'll take a short break. when we come back, we'll be going out to copenhagen. jeff is on the ground there. what can we expect? >> reporter: hi, ross pup wouldn't have thought that a decision by the environmental protection agency in the united states could cause so much excitement here in copenhagen, but there is a notable lift in the tempo here.

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priority mail flat rate boxes only from the postal service. a simpler way to ship. call or go online now to get started. welcome back to "worldwide exchange." it is now 23 past 5:00 in the u.s. on the east coast. i'm up and at em. i hope you are, too. let's take a peek at the markets and see whether they're up and at em. they're up from where we are. 0.3% give or take between friends. the economic calendar is pretty slim today. nothing to speak of, if you will. investors will focus perhaps on a $40 billion auction of three-yee notes. we will to be delve into president obama's speech on the economy. and texas instruments will report its mid quarter update after the close today.

it's one of the few companies that still routinely does it. the mid quarter update is retro. i like it just for that reason alone. ge capital has an analyst briefing at 2:00 p.m. new york time. the unit continues to struggle from loan losses in its commercial, real estate and mortgage credit card businesses. ge is running a multi million dollar add campaign touting their lending to small and mid sized companies, even though they are actually making fewer loans. >> i like the old label there, the money bank as opposed to banks that don't have money, i suppose. right. the u.s. environmental protection agency has been warming hearts up in copen hailg haguen for day two of the climate change meeting there. are they going to do anything to cool the ice caps? geoff is with us with more. what are they saying? >> reporter: ross, it's very interesting, isn't it? because the focus ought to be here in copenhagen. but the announcement through the last 24 hours from the epa in

the united states, that they now consider these greenhouse gases dangerous to health has changed the negotiating clout that the u.s. delegation combs to copenhagen with. sxhir guess when we saw that change from the beginning to the end of the fort night of discussions, we were all wondering why exactly he had changed the timetable. now it's becoming clear. the epa announcement allows him to side step the congestion in the senate, where the climate bill is now stuck, and if he wants to give some firmer commitment on immediate short-term gas reduction measures. let's listen in to what lisa jackson, head of the epa had to say on that decision. >> today, i'm proud to announce that epa has finalized its endangerment finding on greenhouse gas pollution and is

now authorized and obligated to make reasonable efforts to reduce greenhouse pollutants under the clean air act. >> well, let's not get carried away, of course. the identities united states remains firmly committed to the existing energy complex it has just because the epa has made this announcement doesn't really change the fundamentals of the carbon based economy that represents the united states. and that's another aspect of what's going on here, ross. people are talking about, well, if we move to a more carbon reduced climate, what is that going mean for the energy complex? steven chu, the energy secretary in the united states says it won't take us away from our dependance on oil, at least in the medium term. >> they're going to continue to use fossil fuels, oil especially. it is incredibly important transportation fuel. but in the meantime, we also know that we have to set a path

for -- and an aggressive path forward to transition away from our traditional uses of energy, renewable energies. >> just to focus on the moment on the odds for a deal here. at this stage, it looks as though there will be some politically binding announcement at the end of this conference. what that ultimately means is no legally binding announcement and that is the bit that really matters as far as the environmentalists are concerned. we also still need to see what real numbers go into the targets for emissions reductions. there's a suggestion that some of the emerging economies want to ensure that we get a firm, legal set of binding agreements by the.middle of the next year, say, but at this stage, that is on the table as a negotiating issue.

it is not something that's been agreed. >> okay. what are investors looking for in investments or not? >> i think for those that are specifically related on energy related investments, they're watching it carefully. but for the a lot on other investors, it's a sideline. it's not their main focus. what i think is so important here, it's so interesting the way the chinese have managed to create an imagery that they're somehow cleaner or on a clean he path than the united states. and i think the facts completely reveal the opposite situation. one of the problems in the united states, most of our environmental policy occurs at the level of the state, it's not federal. so internationally, it's harder to follow. but it doesn't mean we don't have one. >> jeff, with this endangerment issue, i'm gettinghe feeling

that copenhagen or cope 15, whatever, is the closest thing though woodstock 11 that we've seen and everybody is in agreement. whatever happened to good old fashioned debate? have people got their fingers in the ears about all the different avenues people are challenging global warming right now and the causes of it? >> reporter: matt, you make a very good point. and at an event like this, i don't think you'd expect there to be too much people inside the big 10 who were here saying, you know what? we need to go back and have a look. there are so many people with vested interests in this process going forward and coming up with some binding targets that, you know, the people that are really saying the science is wrong, the science is flawed are the ones who are outside demonstrating and protesting. i think the point to make here is the chinese seem to have had the momentum. the united states announcement from the epa is just one attempt

for obama to try and get back that control. >> all right, geoff cutmore, thanks very much. we'll be checking in with him throughout the day. still to come on "worldwide exchange," what did friday's jobs report mean for the u.s. economy? ben bernanke has played down those results. but could it be that the recovery is picking up steam? we're going to discuss that with our global strategy panel right after this break. but in the meantime, let us know what you think.

all right, folks, welcome back to "worldwide exchange." these are the headlines that we're tracking around the global at this hour. the u.s. is waiting to see what president obama has on his plate today in terms of getting people back off the unemployment line. >> while here in europe, industrial output in the uk has stagnated in october. it fails to grow and misses expectations. >> and here in asia, japan's new $81 billion stimulus package

fail toes excite markets and the nikkei snaps a six-day rally. >> all right, folks, half past 5:00 in the morning and the east coast, if you will, and take a look here. generally speaking, ross, a positive bias, slightly positive. european stocks, matt, exactly where we finished yesterday at 5300. slightly stronger for the xetra dax up .2%, 0.4% for the smi. strength today in technology, media and he's. now, what about the dollar, christine, how are we faring on that? >> well, the dollar, ross, looking weaker against the yen. dollar/yen, 88.59 after the comments coming out from ben bernanke that rates will remain low for a considerable amount of

time. euro/dollar, 1.4845. sterling/dollar, 176342. and we have the euro against sterling, 0.9082. >> just when you thought not enough was being done, president obama is going to outline new efforts to tackle unemployment. the president isn't expected to detail programs or precise spending figures. on monday, he hinted at possibly using unspent t.a.r.p. money for job creation rather than deficit reduction. joining us now for strategy, john kerry, executive vice president portfolio manager at pioneer investments and still along for the ride, phillipya malgram, asset management. john, what do you think about, you know, the hint at using unspent t.a.r.p. money at more stimulus, basically, rather than deficit reduction?

have we not spent enough and wasted enough? >> there is obviously a lot of pressure on people in washington to get the economy moving and job creation is high on everyone's list. with an election coming up, you can see that people in washington are wanting to do something sooner than that. >> yeah. even if it's the wrong thing, like spending until debt until kingdom come. what do we have, a trillion and a half deficit from this year alone and growing? >> yes. it's a concern on the horizon. we have to figure out what to do about that deficit and, of course, the dollar, the fate of the dollar is going to hinge on our deficit reduction plans over the next couple of years. >> although i guess in the short-term, pippa, you're with me in london, it depends on the

view of the fed and certainly on friday after that employment report, dave was starting to price in perhaps rates moving in june or july. and yesterday, ben bernanke came out and is just three days later said, whoa, hold your horses a little bit. what's going on here? >> you think they're coming out and saying, the economy is getting stronger, small businesses are the source of employment, not big ones, and it will scare those on the boards who don't want to move rates. but the key thing is to distinguish between rates that won't move for a long time and means of researching that from the system. and i think this has gone to speculative engagements and not much has gone to actual lending.

and it's making the financial system arguably more fragile and dangerous than it was before the crisis started. >> john, do you go along with that? of course, the view was that it was designed to raise all boats and that helps the banks out with their corporate loan books. >> the issue right now for a lot of the banks is commercial lending. we're waiting to see how that all shakes out. but the problems are not solved yet and some of the bad loans are still there on the books. and banks are in shaky condition in some respects. and so we have to watch that sector quite longly. it's a very delicate matter. >> john, the banks aren't actually capable of lending. it's not that they don't have the capital. it's that they've become so accustom to relying on a mathematical formula for deciding who should receive a loan and should shouldn't, they've fired all the lending officers who understand the

businesses they're looking at. so as long as the algorithm says don't make the loan, nobody can override it. >> one of the problems, i think, in the banking sector is the loss of lending culture over the last few years. it was so easy to make money on subprime lending and securitization and prime brokerage and m&a and derevives transactions and what have you, that people lost the art of banking. they lost a sense of traditional lending culture. and rebuilding that, i think, really is the main issue on the agenda for the banking industry over the next several years and remembering how to do it. >> and john, this is christine here in asia. give us some real investment advice. where would you be putting your money in today? >> i tend to be contrarian. right now i'm intrigued by some of the markets that have lagged this year. oil and gas companies, electric

utilities, pharmaceutical and other health care names, consumer product companies. you've had very big moves in materials and technology as well as in some recovering areas of the financial sector and a few other parts of the markets. but i tend to look at those areas that are a little more depressed, out of favor, and i think income will be a consideration. people will be looking to stocks for income and there's some very high quality large cap multi national companies. pardon me? >> what don't you like? it seems like you liked almost everything there. dividends, the whole pot. >> well, as i mentioned, some of the areas in the market have done awfully well this year, include technology and materials, some of the highly

cyclical stocks have gained a lot, especially since early march. i would tend to be putting new money into those areas that have lagged, such as consumer products, utilities, integrated large international oil and gas companies and even some financial companies. some of the banks are lagging, as well. >> john, what do you see in terms of private lending? if the banks aren't going to make the loans, the companies are still wanting to proceed with their businesses. and i'm hearing that the rates of return on private pools of capital being lend out to corporate are generating phenomenal returns. sometimes margins like 30% on an annualized basis. what are you hearing about that? do you think that is a good signal that money is making its way to the right place? >> that's probably a temporary

phenomenon and there are obviously still some bottlenecks. there are still some areas of the money markets that are a little bit frozen relative to where they were a couple of three years ago. but all of that will get sorted out as we move forward. but right now, we see a lot of the problems being a lot of people don't want to borrow. people are very concerned about their future, especially consumers regarding unemployment. they are just being very, very conservative with respect to taking out new loans and businesses, as well, especially in some of those highly tkal areas of the economy that have been hurt the most during this downturn. they're cautious about spending them from a capital point of view. >> john, thank you very much. we'll get a final thought from pippa, as well, in just a few moments. still to come on "worldwide exchange," is it time to do the

shuffle? at least that's what morgan stanley's new ceo is expected to do. we'll have details of that after the break.

welcome to cnbc's "worldwide

exchange." these are some of the top stories that we're tracking around the world at this hour. cnbc has learned that the u.s. pay czar ken feinberg will not raise a $500,000 salary cap for the top 25 employees at aig. feinberg is expected to rule on pay plans for the second tier of top earners at the company and five other companies by next week. sources tell cnbc that he'll provide some flexibility for aig to boost the cash portion of those executives' pay if good cause can be shown. the bank of america's board could name a new ceo when it meets later today. the time sg ideal given that they've reached a deal to repay their $45 billion in t.a.r.p. chief risk officer greg curl seen as one of the key of morgan stanley's james goreman is said to raise management.

that is the company's biggest division. both stocks trading lower by nearly 2% in frankfurt right now. and also, fedex raised their second quarter outlook just a week before they report the result, higher cost cuts, stronger demand internationally. the package delivery giant is singling out asia and latin america as the main drivers for the profit boost. fedex shares were up 3% in after hours trade in the states. christine. >> matt, china mobile and research in motion will offer blackberry hand sets and internet service to smaller firms in china as well as individual consumers. china mobile offers blackberrys to large enterprise customers but has not aggressively promoted the service until now. the agreement will intensify the hand set competition on the mainland where rival telco china unicom is already selling apple's iphones. >> phippa is about to leave us.

tell us, is it going to be harder to just play the liquidity theme? >> yeah, i think it is. i think volatility will be the play next year. people who are long every risk@asset are going to find that hurts them. you need to distinguish between those things that you really want to own, that you think have a solid underlying -- >> what do you want to own? >> aif long list, i must say. but i think the dollar is gonna -- i think the u.s. dollar next year has a chance of really surprising everybody as we see the liquidity start to be pulled away and interest rates go up. >> phippa malmgren, thanks for that. becky is with us to tell us what's coming up on "squawk box." oh, look at that. >> here i am again. >> we've got 30 minutes to go. >> we've got 13 minutes. we're in these boxes again. hang on a second. i'm getting used to all this. coming up this morning, we've got an exclusive interview with one of the most powerful women on wall street. we've got meredith whitney.

she's going to sit down with us at 8:00 a.m. eastern time. we will get her latest call on the big banks, the economic recovery and the job market and more. plus, president obama is set to outline his new jobs package. austin goolsbee will be joining us as well. analysts believe that celgene can boost sales. it's a new drug. and general motors will give us an update on its business plan. we'll have that breaking news coming up at 8:30 a.m. eastern time. "squawk box" is coming up at the top of the hour. and ross, i'm waiting to see if i go back in boxes here. hang on a second. there we go. hello! >> hello. >> by the way, elnesto sounds sicko. go home, buddy. >> take a sick day, right? we'll see. you know, this is a coveted

shift, beck. >> you'd better go home and get some rest. >> there is no resting at the house denesto. but i can try. thank you very much. up next, we're going to take a look at what's expected throughout the day as we begin to tackle a tuesday. so stay healthy, stay with us through the break and come on back. hi, may i help you? yes, we're looking to save on car insurance, even if that means we have to shop all day, right, honey? yep, all day. good thing you're starting here. we compare your progressive direct rate to other top companies', so you can save money! look! we saved a lot! and quick, too. and no more holding her purse! it's a european shoulder bag. it was a gift. mm-hmm.

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all right, folks, we're back here today. no real big economic data to speak of. president obama's speech in the middle of the day on the economy and jobs will be notable. then after the close, texas instruments will give us their mid quarter update to see how the chip sector is doing. ge capital has an analyst meeting in new york city today. the company is advertising about making loans, but in reality isn't lending as much as it did.

so let's get a look ahead at the u.s. trading day. john kerry, executive vice president portfolio manager joins us again. john, if we take a look at what's going on out there, we had mentioned people are concerned, they're reluctant to borrow, some businesses are, as well. ben bernanke said yesterday that the recovery is improving but fragile. i mean, is that an environment that you want to invest in in anything other than defensives or, say, gold armageddon-type strategies? have we got notten ahead of ourselves? >> it extends on your time horizon. near term, i think we could still see a spade of profit taking before the end of the year. especially if people are looking ahead to higher capital gains taxes at some point. they might decide to book some of their gains between now and the end of the month. we'll have to watch for portfolio reopgz positioning, as

well. there have been some groups that have done very well this year and other groups have lagged. people might start shifting their assets around and might start taking advantage of some of the lower prices and sectors. on the other hand, there's a lot of money and equity coming into the market. confidence has returned. still a little shaky in some respects. but definitely a much better environment than this time last year. >> and john, christine here. how does q4 earnings look to you? >> we're seeing a steady improvement in earnings over the next couple of years. quarter by quarter. year by year. we see the economy doing better and corporate earnings will respond. right now with increase in sales, a lot of the money goes

straight to the bottom line. that's normal in the early stages of recovery that you get some outsized profitability on the back of the cost cutting that companies have done. but as we move through the economic cycle, we'll see increase necessary sales which will likewise bring better earnings results. >> if president obama comes back from copenhagen with some kind of a deal in hand, is this really the right time to commit to a global agreement like that, especially even domestically, passing sort of a cap and trade legislative package, which everyone says would be very expensive and possibly injurious to the economy? >> well, we have to keep in mind at all times is that we invest in a political, legal and associate context. and sometimes if the choice this time is for a slower growth, and more environmental benefits or alleged benefits, depending on

your point of view, that's just something that we'll have to take into account when we're doing our stock analysis when we're making our returns estimates, when we're building our expectations for results. we immediate may need to moderate some of those expectations if society and the government have made these choice that they would rather have a cleaner environment than faster economic growth. >> thank you, very much, john. pretty quiet, if you will. so that's it for today's show. i'm matt nesto here in the states. >> and i'm ross westgate here in europe. >> here in asia, i'm christine tan. thanks for your company here auto "worldwide exchange." tdd#: 1-800-345-2550 if i'm breathing, i'm thinking about trading. tdd#: 1-800-345-2550 i always have my eye out for a stock on the move.

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good morning. banks trying to pay back t.a.r.p., and now some government officials want to use the money to jump start job growth. fedex delivers, the company raising its outlook. shares are taking off this morning. the markets at this hour, a rough session in asia overnight. a mixed start in europe. but equity futures with pointing to a higher open as "squawk box" begins right now. >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and carl quintanilla. carl, welcome back. we missed you. making headlines this ni